18-005833F Artem M. Joukov vs. Office Of State Attorney Second Judicial Circuit Of Florida Status: Closed DOAH Final Order on Monday, August 19, 2019.

Summary: Petitioner is not entitled to attorneys' fees where Respondent had a good faith basis to pursue reimbursement of overpayment, the claim was supported by fact and law, and was not filed for an improper purpose.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ARTEM M. JOUKOV,

Petitioner,

vs. Case No. 18 - 5833F

OFFICE OF STATE ATTORNEY SECOND

JUDICIAL CIRCUIT OF FLORIDA,

Respondent.

_______________________________/

FINAL ORDER

A duly n oticed final hearing was held in this matter on

May 30, 2019, in Tallahassee, Florida, before Suzanne Van Wyk ,

an Administrative Law Judge assigned by the Division of

Administrative Hearings .

APPEARANCES

For Petitioner: Artem M ikhailovich Joukov, Esquire

2651 Ellendale Place, Apartment 304

Los Angeles, California 90007

For Respondent: Michael P. Spellman, Esquire

Mitchell J. Herring, Esquire

Sniffen & Spellman, P.A.

123 North Monroe Street

Tallahassee, Florida 32301

STATEMENT OF THE ISSUE

Whether Petitioner is entitled to attorneysÓ fees, pursuant

to sections 57.105, 57.111, and 120.595, Florida Statutes, for

defending the underlying overpayment claim filed by Respondent.

PRELIMINARY STATEMENT

On August 28, 2018, Pe titioner filed a Motion for

AttorneysÓ Fees with the Division of Administrative Hearings

(Ðthe DivisionÑ or ÐDOAHÑ) in Case No. 18 - 4235. In that case,

Respondent herein sought the return of an overpayment to

Petitioner following PetitionerÓs separation fr om RespondentÓs

employment (Ðthe underlying overpayment claimÑ). The

undersigned dismissed the underlying overpayment claim, with

leave to amend, on October 2, 2018. On October 18, 2018,

Respondent filed a Notice in Response to the October 2, 2018,

order , in which Respondent essentially withdrew its claim for

overpayment for reasons set forth therein. On October 25, 201 8,

jurisdiction over the underlying overpayment claim was

relinquished to Respondent, and the case was closed. Petitioner

filed an Amend ed Motion for AttorneysÓ Fees on October 29, 2018

(ÐAmended MotionÑ), and an Addendum to the Amended Motion on

November 19, 2018.

PetitionerÓs Amended Motion was assigned case

number 18 - 5833F , and a final hea ring was scheduled for

February 11, 2019. Foll owing the undersignedÓs denial of

PetitionerÓs motion to appear telephonically at the final

hearing, the undersigned granted PetitionerÓs Motion for a

Continuance and continued the final hearing to May 30, 2019, to

coincide with PetitionerÓs planned travel to the area from

California.

The hearing commenced as rescheduled on May 30, 2019.

Petitioner testified on his own behalf and proffered the

testimony of Jack Campbell, State Attorney for the Second

Judicial Circuit of Fl orida. PetitionerÓs Exhibits 2 th rough 4,

10 through 22, 24, 35 through 38, and 45 were admitted in

evidence. Petitioner also proffered exhibits 26 through 34,

which were not admitted, but travel with the record of this

case.

Respondent presented the testimony of Jennifer Peddicord,

Gove rnment Operations Consultant III for the Department of

Financial Services, Bureau of State Payrol l. RespondentÓs

Exhibits 3 through 5, 7, 8, 16, and 17 were admitted in

evidence.

The one - volume Transcript of the final hearing was filed on

June 14, 2019. Pursuant to the undersignedÓs Order Granting

Extension of Time, the partiesÓ proposed final orders were due

30 days after the date on which the Transcript was filed, or

July 15, 2019. 1/

Both parties timely filed p roposed f inal o rders, 2/ and the

undersign ed has considered RespondentÓs entire submittal in

preparing this Final Order. PetitionerÓs post - hearing submittal

exceeded the 40 - page limit and Petitioner did not seek leave

from the undersigned to exceed the page limit. See Fla. Admin.

Code R. 28 - 106. 215. Therefore, the undersigned only considered

the first 40 pages of PetitionerÓs 68 - page submittal in

preparing this Final Order.

Unless otherwise noted, all citations to the Florida

Statutes are to the 2018 version.

FINDING S OF FACT

Parties

1. Petitio ner, Artem Joukov, is a member of the Florida

Bar, and was employed as an Assistant State Attorney in the

Office of the State Attorney of the Second Judicial Circuit

(ÐState AttorneyÓs Office Ñ or ÐSAOÑ) from April 29, 2016, to

February 20, 2018.

2. Petiti oner claims to be the sole proprietor of an

unincorporated investment company, of which he is the only

employee. In support of this claim, Petitioner introduced in

evidence the 2016, 2017, and 2018 account activity statements

from his individual stock por tfolio and other equity investments

made through the platform, Interactive Brokers, LLC, whose

business address is in Greenwich, Connecticut.

3. The year - end value of PetitionerÓs account did not

exceed $250,000 in any of the three referenced years.

4. R espondent, the State Attorney Ós Office , is a

government entity which qualifies as a state agency pursuant to

section 120.52, Florida Statutes (2019).

5. Respondent did not employ Petitioner as an investment

advisor or otherwise utilize PetitionerÓs invest ment skills.

Underlying Overpayment Claim

6. Respondent terminated PetitionerÓs employment on

February 20, 2018. Respondent paid Petitioner through the end

of the pay period on February 28, 2018. PetitionerÓs final

paycheck included $940.04 for days sub sequent to his termination

(days on which he did not work).

7. As of the date of the final hearing, Petitioner had not

reimbursed Respondent for the overpayment. 3/

8. Carol Houck is the Human Resource Administrator and

Purchasing Administrator for the St ate AttorneyÓs Office.

Ms. HouckÓs primary job duties include administration of both

the personnel hiring and separation processes.

9. Ms. Houck discovered the pending overpayment while

processing payroll records after Petitioner was terminated.

10. On February 26, 2018, Ms. Houck notified Petitioner of

the overpayment, via electronic mail (ÐemailÑ), and requested

Petitioner repay that amount as soon as possible via check to

the SAO.

11. On February 27, 2018, Petitioner responded, ÐOf

course!Ñ Petition er then inquired whether Respondent could

retrieve the overpayment from his deferred compensation account.

Petitioner explained that, as he had not yet obtained new

employment, he would not be in a position to repay that amount

if the scheduled deduction from his final paycheck had been made

to his deferred compensation account. Petitioner requested

Respondent Ðgive [him] some additional timeÑ to repay the money

if it could not be pulled from his deferred compensation

account.

12. Ms. Houck discussed the issue with Mary Dean Barwick,

the Executive Director for the State AttorneyÓs Office.

Ms. Barwick is primarily responsible for the overall

administrative management of the SAO, including oversight and

management of the budget and expenditures.

13. The f ollowing day, February 28, 2018, Ms. Houck

responded to Petitioner with an offer to use PetitionerÓs

accrued leave hours to cover the overpayment, rather than

disrupt his deferred compensation account. She explained that,

after deduction for the overpayme nt, Petitioner would have a

balance of approximately 12 hours of accrued leave, which

Respondent could either transfer, or pay out, to Petitioner.

14. Petitioner responded on the same date rejecting

RespondentÓs offer to recoup the overpayment from his ac crued

leave. Instead, Petitioner explained that he preferred reversal

of the automatic deposit to his deferred compensation account

rather than recoupment from his accrued leave. In lieu of

accepting that method, Petitioner requested more time to submit

the repayment.

15. The following day, March 1, 2018, Ms. Houck replied,

ÐWe will give you until March 31 st to remit payment.Ñ Petitioner

immediately replied, ÐOk, thank you.Ñ

16. On March 12, 2018, Petitioner became employed by the

Department of Busines s and Professional Regulation (ÐDBPRÑ). On

that same date, Petitioner sent an email to Ms. Houck stating

that he no longer wished Respondent to secure repayment from his

deferred compensation account and that the best method of

repayment would be in insta llments by the end of April. He

proposed to pay $337.05 by March 31, 2018, and the remaining

balance by April 30, 2018.

1 7 . On March 28, 2018, Ms. Houck rejected this offer and

replied with a request that Petitioner pay the amount in its

entirety by Marc h 31, 2018, in accordance with the payment plan

agreed to on March 1, 2018. Ms. Houck further stated that she

would transfer his accrued leave hours to DBPR once Respondent

received the repayment.

1 8 . Petitioner made no payment to Respondent on March 31,

2018, or on any date thereafter.

19 . On April 6, 2018, Ms. Barwick sent the following email

to Petitioner:

We have received guidance from the Bureau of

State Payrolls [sic]. Their procedures are

[sic] immediate collection of the

overpayment. Once the d eadline we establish

is not met and you have been notified twice

(by certified mail), then we can proceed

with the collection process. The Bureau of

State Payrolls would proceed by collecting

the overpayment from your current wages and

remitting the funds directly to us. We feel

it would work better for both parties to

reach an agreement on the repayment date.

Please advise us on the most current date

you can remit your overpayment. I will be

glad to answer any questions you may have on

this matter. Th ank you.

2 0 . On April 7, 2018, Petitioner responded, recounting the

various communications he had received regarding repayment of

the overpayment, and requesting Respondent to cite the

applicable administrative rules under which it was pursuing

repayment . He also requested contact information for a

representative at the Bureau of State Payroll (the ÐBureauÑ) to

help him understand his rights as an employee.

2 1 . In the same response, Petitioner stated that he did

not believe RespondentÓs action withholdi ng PetitionerÓs leave

hours was permissible and requested Respondent to transfer the

leave hours to DBPR.

2 2 . On April 9, 2018, Ms. Barwick requested PetitionerÓs

telephone number in an effort to discuss a repayment schedule.

Petitioner responded that he wished to continue using email

communication to have a record of their correspondence.

Petitioner reiterated his requests for transfer of his leave

hours and contact information for someone at the Bureau.

2 3 . On April 10, 2018, Ms. Barwick replied, ÐYou r

overpayment of wages is due immediately.Ñ She stated that the

governing regulations were the Classification and Pay Plan for

State Attorneys of Florida. Ms. Barwick offered to transfer

PetitionerÓs leave hours if they could agree to a repayment

schedul e, and expressed that she would rather avoid the

collection process outlined in her prior email. Finally, she

requested a good time to call and discuss the issue.

2 4 . In his response that same day, Petitioner reiterated

his desire to keep discussions in writing via email, for record -

keeping purposes. He further stated he had contacted the DBPR

Human Resources Department to determine whether a portion of his

wages could be redirected to the Respondent on a monthly basis.

Petitioner stated he was unable to discuss a repayment plan with

Ms. Barwick until he had that information. Petitioner again

requested Respondent either transfer his leave hours or provide

the statute authorizing Respondent to withhold his accrued

leave.

2 5 . On April 12, 2018, Ms. Houc k, transferred PetitionerÓs

accrued leave to DBPR.

26 . Petitioner filed a complaint regarding RespondentÓs

efforts to recoup the overpayment with the Florida Commission o n

Human Relations (ÐFCHRÑ) some time between April 11 and 19,

2018. 4/

2 7 . On April 1 9, 2018, Ms. Barwick emailed Petitioner a

proposed reimbursement agreement for his review. The proposed

agreement would have required Petitioner to repay the

o verpayment in two installments -- on June 1 and July 1, 2018.

Petitioner responded that he would not be engaging in repayment

negotiations until the FCHR had the opportunity to conclude its

investigation. 5/

2 8 . After the parties failed to reach an amicable

repayment plan via email, Respondent initiated the formal

collection process. On May 2, 2018, Respondent sent the

following letter to Petitioner via certified mail to his home

address in Tallahassee:

Dear Mr. Joukov:

As we have outlined in numerous email

correspondence, you were overpaid by the

Office of the State Attorney for 48 unearned

hours in the amount of $940.04. This

overpayment occurred as a result of your

separation from the office after payroll had

closed in February 2018.

Despite repeated requests, to date, we have

not received any monies due back to the

State for this overpayment. P lease accept

this letter as our demand to repay this full

amount by the close of business, May 21,

2018.

You may be entitled to a hearing under

Section 120.57, F.S., or other rights under

Section 120.569, F.S. However, please note

that employees of the O ffice of the State

Attorney are exempt from Career Service

System provided in Ch. 110, F.S., and are

governed by the Classification and Pay Plan

for the State Attorneys of Florida. You

will be expected to repay the net amount

received plus federal taxes d ue if the net

amount is not fully repaid in the same

calendar year in which it was paid.

This letter represents the notice required

by and is in compliance with the process for

collecting salary overpayments issued by the

Bureau of State Payroll.

29 . Pe titioner intentionally failed to retrieve the

certified letter from the post office.

30 . On May 15, 2018, Respondent sent the letter again by

certified mail to the General CounselÓs Office at DBPR. The

letter was identical except that it set a deadline o f May 31,

2018, for Petitioner to repay the full amount. Petitioner

received this letter via interoffice mail at DBPR. Petitioner

did not respond to the letter.

3 1 . On June 15, 2018, Respondent personally served the

letter via sheriffÓs deputy to Petiti oner at his office at DBPR.

Again, the letter was identical to the May 2 and 15 letters,

with the exception of a June 28, 2018, due date for full

payment. Copies of the May 2 and 15 letters were included with

the June 15, 2018 hand - delivered letter.

3 2 . Petitioner did not respond to the June 15, 2018

letter .

3 3 . On or about July 19, 2018, Petitioner filed a

complaint with the Florida Bar against one of his former

colleagues at the SAO.

3 4 . On July 30, 2018, Petitioner alerted the Florida Bar

to a pendi ng address change, notifying the Bar of his intent to

move to California on August 1, 2018. In this correspondence,

he included his parentÓs address in Gulf Shores, Alabama, as the

interim contact while he established a permanent address in

California.

3 5 . Having had no response from Petitioner, Respondent

forwarded the demand letters and other information to the Bureau

to execute the process for garnishing PetitionerÓs DBPR wages.

3 6 . On July 30, 2018, Constance Hosay, Financial

Administrator with the B ureau, sent a letter to DBPR authorizing

miscellaneous deductions from PetitionerÓs paycheck beginning

with the next bi - weekly payroll. The letter directed DBPR to

remit the monies to the SAO once collected via miscellaneous

deduction.

3 7 . Ms. Hosey info rmed Petitioner, via email on July 31,

2018, that the Bureau would begin garnishing his wages to

reimburse Respondent.

3 8 . Petitioner then reached out to the Division to

determine how to request a hearing on the matter. At the

direction of Division staff , Petitioner sent an email to

Mr. Campbell that same date requesting an administrative

hearing.

39 . Petitioner voluntarily separated from employment with

DBPR on August 2, 2018.

4 0 . On August 9, 2018, Respondent forwarded PetitionerÓs

request for hearing to the Division. On August 15, 2018,

Respondent followed up with a letter to the Division attaching,

as the agency action letter, the personnel action request

documenting PetitionerÓs termination date, the salary refund

calculations made by payroll, and the payroll calendar.

4 1 . None of the documents forwarded to the Division from

the SAO contained an address for Petitioner.

4 2 . Respondent filed the first pleading -- a Notice of

Appearance by Eddie Evans on behalf of Respondent. The

certificate of servic e noted an address for Petitioner in Gulf

Shores, Alabama. The SAO had knowledge that Petitioner had

moved from Florida to California . The SAO had knowledge of

PetitionerÓs parentsÓ address as an interim contact from the

separate Florida Bar complaint.

4 3 . The Division entered the Gulf Shores, Alabama address

in its case information system as the address for Petitioner.

4 4 . PetitionerÓs first pleading was filed on August 23,

2018, and contained his address in Los Angeles, California , in

his signature li ne. However, Petitioner never filed a notice of

change of address or otherwise notified the Division of his

correct address.

4 5 . Throughout the underlying repayment claim, the

Division mailed all orders to the Gulf Shores, Alabama address.

4 6 . On August 28, 2018, Petitioner filed a motion to

dismiss the underlying overpayment claim on grounds that the

documents upon which his request for hearing were predicated did

not constitute a valid agency action letter and point of entry .

Following a telephonic he aring on the motion, the undersigned

granted the motion on October 2, 2018, and dismissed the case,

with leave to amend. The undersigned gave Respondent 15 days to

serve Petitioner with a notice of agency action which complied

with Florida Administrative Code Rule 28 - 106.111 and section

120.569(1), Florida Statutes.

4 7 . On October 18, 2018, RespondentÓs current counsel

entered a notice of appearance and a Response to the Order

Granting the Motion to Dismiss (ÐResponseÑ).

4 8 . In the Response, Respondent e xplained that, subsequent

to the Order, it had determined that the State of Florida Ðis no

longer withholding any [of PetitionerÓs] funds which represented

the underlying basis of this proceeding.Ñ Respondent stated

that the proceeding was initiated with RespondentÓs notice that

it intended to collect Ðfunds held by the State of FloridaÑ as

reimbursement for the overpayment. Further, Respondent

explained, ÐBecause the State of Florida no longer holds those

funds, the due process to be afforded the Respond ent through

this forum is no longer applicable.Ñ

49 . On October 19, 2018, Petitioner filed a Motion for

Extension of Time to File Motion for Costs and AttorneysÓ Fees,

seeking an extension of 30 days to file a motion for attorneysÓ

fees to comply with the safe harbor provision under section

57.105. The undersigned denied the motion and indicated that

Petitioner could subsequently file a motion for fees and costs

which would initiate a new case separate from the underlying

overpayment claim.

5 0 . The under signed closed the file of the underlying

overpayment claim and relinquished jurisdiction of same to the

SAO on October 25, 2018.

5 1 . Petitioner filed a Notice of Service of a Motion for

Sanctions pursuant to section 57.105 on October 26, 2018. On

October 29, 2018, Petitioner filed his Amended Motion seeking

fees under sections 120.595 and 57.111. On November 19, 2018,

Petitioner filed an addendum to his Amended Motion seeking fees

pursuant to section 57.105.

5 2 . Petitioner engaged in the underlying over payment claim

in his individual capacity as a former employee, not as a small

business entity or investment company.

CONCLUSIONS OF LAW

The Parties and Standing

5 3 . The Division has jurisdiction over the parties to, and

the subject matter of, this proceed ing. See §§ 120.569 ,

120.57(1), 120.595(1), 57.105(5), and 57.111(4)(b),

Fl a. Stat . (2019).

5 4 . Respondent is a state agency pursuant to section

120.52, Florida Statutes (2019).

5 5 . Petitioner may recover attorneysÓ fees for self -

representation. See Al britton v. Ferrera , 913 So. 2d 5, 12 - 13

(Fla. 1st DCA 2005)(citing Friedman v. Backman , 1984 Fla. App.

LEXIS 14676 *2 (Fla. 4th DCA 1984)(ÐIn a frivolous suit against

a lawyer, he is entitled to attorneyÓs fees for his time and

effort under section 57.105, just as he is for services rendered

by counsel he employs to represent him.Ñ); see also Maulden v.

Corbin , 537 So. 2d 1085, 1087 (Fla. 1st DCA 1989).

5 6 . In seeking attorneysÓ fees, Petitioner must prove he

is entitled to attorneysÓ fees by a preponderan ce of evidence.

See § 120.57(1), Fla . Stat .

Section 57.105

5 7 . Petitioner is entitled to an award of attorneysÓ fees

under section 57.105 if (1) Petitioner is the prevailing party;

(2) Respondent is the losing party; and (3) Respondent knew or

should hav e known that its claim was not supported by the

material facts or the application of existing law to those

facts. See § 57.105, Fla. Stat.

58 . Ð[A] party who receives affirmative judicial or

equitable relief is clearly considered a prevailing party under

the law.Ñ Coconut Key HomeownerÓs AssÓn v. Gonzalez , 246 So. 3d

428, 434 (Fla. 4th DCA 2018). Petitioner received affirmative

relief when the undersigned granted his motion to dismiss the

underlying overpayment claim. Petitioner is the prevailing

party in the underlying overpayment claim.

59 . Respondent is the non - prevailing, or losing, party in

the underlying overpayment claim.

6 0 . While Petitioner has proven the first two elements of

the fees inquiry, he has not proven the third element. See

Whitte n v. Progressive Casualty Ins. Co. , 410 So. 2d 501, 505 -

506 (Fla. 1982)(holding that Progressive was not entitled to

attorneysÓ fees because the initial claim was not frivolous).

AttorneysÓ fees should only be awarded when the non - prevailing

partyÓs claim was frivolous, lacking any justiciable issue. Id.

When the non - prevailing party presents a frivolous claim and it

Ðis so readily recognizable that there is little if any prospect

whatsoever that it can succeed,Ñ payment of attorneysÓ fees to

the prevail ing party is warranted. See Whitten , 410 So. 2d

at 505.

6 1 . The underlying overpayment claim was not frivolous.

It was not obvious that RespondentÓs claim, attempting to recoup

an overpayment, would not succeed. The undisputed fact is that

Petitioner was overpaid by Respondent in the amount of $940.04.

RespondentÓs claim to recoup the overpayment was supported by

the material facts. Petitioner cited no authority to support a

conclusion that RespondentÓs pursuit of the overpayment was not

supported b y existing law. 6/

Section 57.111

6 2 . Petitioner is entitled to attorneysÓ fees under

section 57.111 if (1) Petitioner qualifies as a prevailing

Ðsmall business partyÑ; (2) Respondent initiated the proceedings

in the underlying case; and (3) the initial pr oceedings were

substantially unjustified. See § 57.111, Fla. Stat.

6 3 . Section 57.111 defines a Ðsmall business partyÑ as

follows:

A sole proprietor of an unincorporated

business, including a professional practice,

whose principal office is in the state, who

is domiciled in the state, and whose

business or professional practice has, at

the time the action is initiated by a state

agency, not more than 25 full - time employees

or a net worth of more than $2 million,

including both personal and business

invest ments.

6 4 . Petitioner did not establish that he operates a small

business with a principal office in the State of Florida. To

the extent that his personal stock trades and other equity

investments qualify as a small business, the evidence does not

suppo rt a finding that the business has a principal office in

the State of Florida. Further, Petitioner resides in California

and did not introduce evidence that he has established domicile

in Florida.

6 5 . Assuming, arguendo , PetitionerÓs personal portfolio

i nvestments through an investment platform in Greenwich,

Connecticut , qualifies as a small business domiciled in Florida,

PetitionerÓs 57.111 claim still fails. The underlying

overpayment claim was brought against Petitioner in his

personal, not business, capacity. ÐThe owner of a partnership

or corporation who prevails in an administrative proceeding

initiated by a state agency is not entitled to attorneysÓ fees

and costs under [57.111] when the complaint is filed against the

owner in his or her individua l capacity.Ñ Daniels v. Fla. DepÓt

of Health , 898 So. 2d 61, 63 (Fla. 2005); see also Fla . Real

Estate CommÓn v. Shealy , 647 So. 2d 151 (Fla. 1st DCA 1994)

( holding that while Shealy was the sole proprietor of a small

business, he was not entitled to atto rneysÓ fees under section

57.111 because he was not sued in his business capacity).

6 6 . Assuming, again, arguendo , that Petitioner was a

prevailing small business party, pursuant to section 57.111, his

claim still fails because Respondent was substantiall y justified

in pursuing the underlying overpayment claim. According to

section 57.111, a claim is substantially justified when it has a

reasonable basis in law and fact at the time the proceeding was

initiated. Gentele v. DepÓt. of Pro fÓl Reg., Bd. o f Op tometry ,

513 So. 2d 672, 672 (Fla. 1st DCA 1987)(holding that appellee

was substantially justified and therefore not liable for

attorneysÓ fees).

67. Petitioner owed Respondent money and had initially

agreed to a repayment plan, but did not follow throu gh with

repayment. Further, Petitioner would not negotiate with

Respondent on other possible repayment plans when the initial

repayment plan was unsuccessful. Respondent, having exhausted

other routes, sought to garnish PetitionerÓs wages.

RespondentÓs initial claim had a reasonable basis in both fact

and law. Unfortunately, due largely to the passage of time,

caused by PetitionerÓs delay and voluntary separation from DBPR,

by the time the underlying overpayment claim came before DOAH,

the State of Flor ida no longer held funds from which to recoup

the overpayment .

Section 120.595

68 . Petitioner is entitled to attorneysÓ fees under

section 120.595 if (1) Petition er is the prevailing party;

(2) Respondent is the Ðnon - pre vailing adverse partyÑ; and

(3) Res pondent participated in the proceeding for an improper

purpose. See § 120.595, Fla. Stat.

69 . For the same reason Petitioner qualifies as the

prevailing party under section 57.105, he also qualifies as the

prevailing party under section 120.595. See § § 57.105

and 120.595, Fla. Stat.

70 . It is well - settled that when an agency is the party

taking action, it does not qualify as a non - prevailing adverse

party. See Johnson v. DepÓt of Corr. , 191 So. 3d 965 (Fla. 1st

DCA 2016); Rafael R. Palacios v. DepÓt o f Bus. ProfÓl Reg. , Case

No. 99 - 4163 (Fla. DOAH Nov. 20, 2000); Ernest Sellars v. Broward

Cnty. Sch. Bd. , Case No. 97 - 3540 (Fla. DOAH Sept. 25, 1997). As

explained in Johnson v. Department of Corrections , Case

No. 15 - 1803F (Fla. DOAH Jan. 1, 2010), when an agency is the

party proposing to take action against another, the agency, Ðby

definition, cannot be a non - prevailing adverse party since it is

the agency that is proposing to take action, not a party that is

trying to change the proposed action.Ñ

71 . In the underlying overpayment claim, Respondent was

the party proposing to take action (i.e., collection of the

overpayment), and as such cannot qualify as a non - prevailing

adverse party pursuant to section 120.595.

72 . Therefore, even though Petitioner in this case

ÐprevailedÑ in the underlying overpayment claim, he cannot

recover attorney sÓ fees under section 120.595.

73 . Assuming, arguendo , Respondent was the non - prevailing

adverse party, Petitioner must show that Respondent brought its

claim for an i mproper purpose in order to prevail in his

attorneysÓ fees claim . See § 120.595, Fla. Stat.

74 . A party participate s in a matter for an improper

purpose when he or she participate s Ðprimarily to harass or to

cause unnecessary delay or for frivolous purpo se or to

needlessly increase the cost of litigation, licensing, or

securing the approval of an activity.Ñ See § 120.595, Fla.

Stat.

75 . Whether a party engaged in an action for an Ðimproper

purposeÑ is analyzed under an objective reasonableness standard

based on the applicable facts and relevant law. See Procacci

Commercial Realty, Inc. v. DepÓt of HRS , 690 So. 2d 603, 608 n.9

(Fla. 1st DCA 1997). In applying the improper purpose standard,

courts should not, as urged by Petitioner throughout this

procee ding, Ðdelve into an attorneyÓs or a partyÓs subjective

intent or into a good faith - bad faith analysis.Ñ Friends of

Nassau Cnty. v. Nassau Cnty. , 752 So. 2d 42, 50 (Fla. 1st DCA

2000)(citing Mercedes Lighting and Elec. Supply, Inc. v. DepÓt

of Gen. Servs . , 560 So. 2d 272, 278 (Fla. 1st DCA 1990)). Ð[I]f

a reasonably clear legal justification can be shown for [the

action], improper purpose cannot be found and sanctions are

inappropriate.Ñ Id.

76 . Respondent had a clear legal justification for

pursuing th e underlying overpayment claim -- Respondent was owed

money paid to, but not earned by, Petitioner. Even if

Respondent were the non - prevailing adverse party, fees are

inappropriate because Respondent did not file the underlying

overpayment claim for an impr oper purpose. 7/

Inequitable Conduct Doctrine

77 . Petitioner also claims entitlement to attorneysÓ fees

under the inequitable conduct doctrine. Under this rarely

applied doctrine, one party may be entitled to attorneysÓ fees

if the other party exhibited e gregious conduct or acted in bad

faith. See Bitterman v. Bitterman , 714 So. 2d 356, 365 (Fla.

1998)(holding that attorneysÓ fees could be awarded when

counselÓs conduct was egregious). Petitioner argues the

undersigned has inherent authority under this c ommon law

principle to award attorneysÓ fees.

78 . The undersigned has no such inherent authority. The

Division is limited to the powers, duties, and authority

conferred by statute. See Fla. Elec. CommÓn v. Davis, 44 So. 3d

1211 (Fla. 1st DCA 2010); DepÓ t of Rev. v. Selles, 47 So. 3d 916

(Fla. 1st DCA 2010); City of Cape Coral v. GAC Utilities, Inc.,

281 So. 2d 493 (Fla. 1973). The undersigned cannot invoke the

in equitable conduct doctrine for an award of attorneysÓ fees. 8/

Constitutional Issues

79 . In PetitionerÓs Motion Raising Constitutional

Challenges to Portions of Florida AttorneyÓs Fees Statutes,

Petitioner raised facial constitutional challenges to section

57.111 (i.e., definition of Ðsmall business partyÑ); section

120.595 (i.e., definition of Ð non - prevailing adverse partyÑ);

any provisions, statute, regulation, rule Ðor other legal

authorityÑ which fails to extend to the undersigned the inherent

authority to impose attorneysÓ fees under the in equitable

conduct doctrine; and Ðany of the statutes above that might

prevent recovery of costs or fees based on domicile, state of

origin, or the location of the party , Ñ under the Privileges and

Immunities clause of the United States Constitution.

80 . Contrary to PetitionerÓs insistence, the undersigned

d oes not have the authority to rule on PetitionerÓs

constitutional claims. As stated in the undersignedÓs Order on

PetitionerÓs Motion Raising Constitutional Challenges, an

administrative agency does not have jurisdiction to address the

constitutionality o f a statutory provision. See B&B Steel

Erectors v. Burnsed , 591 So. 2d 644, 648 (Fla. 1 st DCA 1991).

Nor is a claimant required to argue the facial constitutionality

of a statute before an administrative tribunal for the issue to

be cognizable on appeal. See Key Haven Assoc. Enterprises, Inc.

v. Bd. of Trs. of the Int. Impust Fund , 427 So. 2d 153, 157

(Fla. 1982). However, a party may choose to complete the

administrative process and then challenge the facial

constitutionality in the district court on direct appeal. Id.

This Ðprocess [] allow[s] all issues to be decided in the least

expensive and time - consuming manner.Ñ Id.

81 . During the final hearing, Petitioner was given the

opportunity to build a record to support his constitutional

claims on appeal. The undersigned makes no conclusions

regarding the constitutionality of the statutes cited by

Petitioner.

ORDER

Based on the foregoing Findings of Fact and Conclusions of

Law, Petitioner, Artem Joukov, is not entitled to attorneysÓ

fees incurred in Case No. 18 - 4235.

DONE AND ORDERED this 19th day of August , 2019 , in

Tallahassee, Leon County, Florida.

S

SUZANNE VAN WYK

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 19th day of August , 2019 .

ENDNOTE S

1/ By agreeing to an extended deadline for filing their proposed

final orders, the parties waived the requirement that this Final

Order be issued within 30 days of the date the Transcript was

received. See Fla. Admin. Code R. 28 - 106.216(2).

2/ The undersignedÓs Order Granting Extension of Time

e rroneously refers to the partiesÓ post - hearing filings as

proposed recommended orders.

3/ Petitioner disputes that he is indebted to Respondent for the

overpayment. Petitioner has pending claims against Respondent

for unlawful discharge and, on that bas is, claims Respondent

owes him (i.e., for damages), not vice versa.

4/ Respondent suggested this occurred on April 16, 2018, but

Petitioner did not affirm the specific date, agreeing only that

it occurred between April 11 and 19, 2018.

5/ The FCHR conc luded its investigation in September 2018,

finding that it did not have jurisdiction in the matter.

6/ Instead, Petitioner points to the error in RespondentÓs

Notice of Agency Action, which excluded an explanation of the

method to exercise his right to a hearing and the timeframe for

doing so. Petitioner argues that the case was dismissed for

that exact error, thus making the SAOÓs claim frivolous -- the SAO

knew or should have known that its claim would be dismissed for

failure to meet the procedural requ irements for a notice of

agency action.

PetitionerÓs argument erroneously equates the undersignedÓs

order granting the motion to dismiss with an order granting a

motion for summary judgment or other order passing on the

substance of the underlying claim. The fact that the SAO

fumbled in crafting the document by which it sought return of

the overpayment does not render the overpayment claim itself

unsupported by fact and law. The fact remains that Petitioner

was overpaid and Respondent had a legal right t o recover that

overpayment.

7/ Here, Petitioner argues that improper purpose can be inferred

from the way the SAO attempted to collect the overpayment.

Petitioner points to the personal service of the demand letter

by sheriffÓs deputy at his place of bu siness, pleadings and

orders mailed to his parentsÓ address, and preparation of

multiple demand letters that fell short of the requirements for

a notice of agency action, as evidence that Respondent initiated

the proceeding to harass Petitioner. None of t hose facts

undermines the conclusion that Respondent had a clear legal

right to recoup the overpayment. Whether Respondent blundered

in its attempts to recoup the overpayment is irrelevant.

Further, Petitioner glosses over his own behavior which

contribu ted to the increasingly hostile character of the

underlying overpayment claim. For example, if Petitioner had

not avoided service of the demand letters by certified mail,

Respondent would not have had to resort to personal service.

8/ Assuming the under signed had the inherent authority to apply

the in equitable conduct doctrine, the undersigned would find

that the doctrine does not to support an award of fees in the

instant case. Respondent, seeking to recoup an overpayment,

attempted to reach an amicabl e repayment plan over a period of

two months by email and only began pursuing repayment by other

means after Petitioner failed to comply with an agreed upon

repayment plan, and subsequently refused to negotiate a new

repayment plan. It was neither egregio us , nor in bad faith , for

Respondent to proceed with garnishment of wages after

negotiations had failed.

COPIES FURNISHED:

Michael P. Spellman, Esquire

Sniffen & Spellman, P.A.

123 North Monroe Street

Tallahassee, Florida 32301

(eServed)

Mitchell J. H erring, Esquire

Sniffen & Spellman, P.A.

123 North Monroe Street

Tallahassee, Florida 32301

(eServed)

Artem Mikhailovich Joukov, Esquire

Apartment 304

2651 Ellendale Place

Los Angeles, California 90007

(eServed)

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is

entitled to judicial review pursuant to section 120.68, Florida

Statutes. Review proceedings are governed by the Florida Rules

of Appellate Procedure. Such proceedings are commenced by

filing the ori ginal notice of administrative appeal with the

agency clerk of the Division of Administrative Hearings within

30 days of rendition of the order to be reviewed, and a copy of

the notice, accompanied by any filing fees prescribed by law,

with the clerk of th e District Court of Appeal in the appellate

district where the agency maintains its headquarters or where a

party resides or as otherwise provided by law.